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What determines informal hiring? Evidence from the Turkish textile sector

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Abstract

Most studies about the shadow economy focus on the estimation of the aggregate size. However, this study aims to address the sectoral or micro aspects of this phenomenon using the data from the textile sector in Turkey. It uses discriminant analysis and ordered and logistic regression models to unveil the determinants of the informal hiring in Turkey. It concludes that high competition, the skill structure of the employees, perceived penalty scheme, and the size of the firms in the sector are important factors of the textile firms hiring informally.

Suggested Citation

  • Fatih Savasan & Friedrich G. Schneider, 2006. "What determines informal hiring? Evidence from the Turkish textile sector," Economics working papers 2006-04, Department of Economics, Johannes Kepler University Linz, Austria.
    • Handle: RePEc:jku:econwp:2006_04
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    File URL: http://www.econ.jku.at/papers/2006/wp0604.pdf
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    Cited by:

    1. Ceyhun Elgin & Muhammed Burak Sezgin, 2017. "Sectoral Estimates of Informality: A New Method and Application for the Turkish Economy," The Developing Economies, Institute of Developing Economies, vol. 55(4), pages 261-289, December.

    More about this item

    Keywords

    informal hiring in Turkish textile sector; discriminant analysis; logistic regression model; ordered regression;
    All these keywords.

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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